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May 2007 NFIP Rate Changes

NFIP premiums increased an average of 6.0 percent for policies written or renewed on or after May 1, 2007. Although rates for subsidized policies increased 7.0 percent, premiums for actuarially rated policies rose only 5.4 percent as a result of leaving the rates for Preferred Risk Policies unchanged while increasing the premiums for Standard X-Zone policies and actuarially rated SFHA policies an average of 7.4 percent.

Premium increases varied by flood-risk zone as described below.


V Zones (coastal high-velocity zones)

Larger rate increases were implemented again this year (1) due to an increased contingency loading (from 10 percent to 20 percent) that more appropriately reflects the volatility in flooding and (2) in response to the Heinz Center's Erosion Zone Study, which clearly indicates that previous rates significantly underestimated the increasing hazard from steadily eroding coastlines.

  • Post-FIRM V Zones: Premiums increased 10 percent.
  • Pre-FIRM V Zones: Premiums increased about 9.5 percent.


A Zones (non-velocity zones, which are primarily riverine zones)

There were large increases this year.

  • Post-FIRM AE Zones: Premiums increased about 6 percent as indicated by the NFIP's actuarial rate model, which includes an increase in the contingency loading from 5 percent to 10 percent.
  • Pre-FIRM AE Zones: Premiums increased about 7 percent, which will help to reduce the amount of the subsidy in these rates.
  • AO, AH, AOB, and AHB Zones (shallow flooding zones): Premiums increased between 9 and 10 percent.
  • Unnumbered A Zones (remote A Zones where elevations have not been determined): Premiums increased about 8 percent. These increases were designed to keep rates in line with Post-FIRM AE Zones.
  • A99 Zones (approved flood mitigation projects, e.g., levees still in the course of construction): Premiums increased about 10 percent.
  • AR Zones: Premiums increased about 10 percent.


X Zones (zones outside the Special Flood Hazard Area)

Moderate increases were implemented.

  • Standard Risk Policy: Premiums increased about 10 percent.
  • Preferred Risk Policy: No changes.


Mortgage Portfolio Protection Program

Rates have been revised to keep in line with increases to A and V Zone policies.
 Last updated on May 1, 2007